Slide 1: Q4 2021 – 18 February 2022
4 N =) N wv O N N jo) N > fe © = = a ) LL © al AXACTOR
Slide 2: Agenda
Agenda 1 Company introduction 2 Highlights 3 Outlook 2 1)
Slide 3: Axactor is an established European debt collection company that has grown rapidly
Axactor is an established European debt collection company that has grown rapidly in targeted markets A leading European debt collector Operating in stable and well developed markets1 • Established in Q4 2015 with headquarters in Non- Oslo, Norway, and is one of Europe’s top-ten Performing 7% 74% 19
Slide 4: Axactor is pursuing a niche strategy to disrupt the industry on cost-to-collect
Axactor is pursuing a niche strategy to disrupt the industry on cost-to-collect NPL cost-to-collect for selected peers in 20201 (%) • Axactor incepted to disrupt the industry on cost- 86% 59% to-collect 48% • Continued innovation and growing economies of 45% 43% 43% scale to fuel further improvement
Slide 5: Agenda
Agenda 1 Company introduction 2 Highlights 3 Outlook 5
Slide 6: Key financial highlights for the quarter
Key financial highlights for the quarter - Headlines of Q4 financials announced in the market update 17 January2 All numbers in EUR -6% -61% -252% • Axactor booked a negative revaluation of EUR 43m in Q4 burdening the financial results2 86m 22m -27m Gross revenue Total income • A majority of the rev
Slide 7: Key financial highlights for 2021
Key financial highlights for 2021 All numbers in EUR 6% -3% -26% • Gross revenue up 6% and Cash EBITDA up 7% y-o-y despite a reduction in book values of 7%2 344m 195m 24m Gross revenue Total income • Implemented a cost reduction program with EBITDA annual savings of EUR 6m • Cost of funding reduced
Slide 8: Highlights per segment in 2021
Highlights per segment in 2021 • The company has acquired NPL portfolios at a gross IRR of 23% in 2021, 8%-points higher than Blending the gross IRR on the total NPL portfolio at year end 2020 NPL the book • Growth in NPL investments during the last two consecutive quarters and EUR 117m already secu
Slide 9: Axactor has a robust balance sheet despite negative revaluations in Q4
Axactor has a robust balance sheet and is well positioned despite negative revaluations in Q4 1 Equity • Satisfying equity ratio of ~30% • Available cash of EUR 42m 2 Liquidity • Unused funding line of EUR ~200m on the revolving credit facility • Satisfying headroom to bond covenants 3 Covenant head
Slide 10: NPL investments significantly above previous quarters and double of replacement capex in Q4
NPL investments significantly above previous quarters and double of replacement capex in Q4 NPL investments (EUR million) 95 90 • NPL investments increasing for the second consecutive quarter 62 54 • NPL investment market normalizing during second half of 2021, but with lower volumes 35 generated du
Slide 11: Axactor is building up forward flow commitments enabling healthy growth
Axactor is building up forward flow commitments enabling healthy growth going forward NPL investments on forward flow contracts (EUR million) Additional forward flow • During 2021 Axactor invested EUR 71m agreements and on forward flow contracts one-off EUR 117m1 acquisitions will • For 2022 we have
Slide 12: NPL investments are made at a healthy gross IRR level
NPL investments are made at a healthy gross IRR level NPL gross IRR total book1 NPL gross IRR per vintage2 +5.6ppt • The single most important profit Medium term improvement initiative for Axactor is to +0.6ppt average expected to improve the portfolio profitability stabilize at 23.4% 21.9% • Gross
Slide 13: Successful implementation of the cost reduction program
Successful implementation of the cost reduction program in 2021 has secured cost declining by 5% y-o-y Total OPEX and D&A1 (EUR million) -4% -5% 33 34 32 32 3 30 3 3 28 27 3 2 28 30 • Axactor is working continuously on 2 3 3 2 implementation of cost reduction initiatives to increase profits and impr
Slide 14: Agenda
Agenda 1 Company introduction 2 Highlights 3 Outlook 14
Slide 15: Outlook
Outlook • The large negative NPL revaluation booked in the fourth quarter 2021 reduces downside risk for collection performance, which is expected to fluctuate around 100% going forward • The cost reduction program has delivered above expectation, rendering a lower cost base going into 2022 than the
Slide 16: Supporting information
Supporting information
Slide 17: Financial highlights Q4 2021
Financial highlights Q4 2021
Slide 18: Declining gross revenue driven by declining REO revenue and backloaded NPL investments
Declining gross revenue driven by declining revenue on the run-off segment REO and backloaded NPL investments Gross revenue (EUR million) -6% 99 95 92 85 86 83 79 78 71 • Run-off segment REO with EUR 3.5m lower revenue y-o-y as the segment is moving into the tail • 75% of NPL portfolio investments i
Slide 19: Financials heavily impacted by negative revaluation in Q4
Financials heavily impacted by negative revaluation in Q4 - Cash EBITDA in line with last year adjusted for REO and EUR 2.2m in settlement cost in Q4 Total Income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 75 -61% 49% 32% -9% 66 32% 25% 29% 34% 22% 62 67 66
Slide 20: Continued positive trend on depreciation and net financials
Continued positive trend on depreciation and net financials D&A1, Net financials and tax Net profit after tax Comments (EUR million) (EUR million) 24 7 5 5 3 17 21 43 1 1 3 3 18 17 14 2 16 15 -2 0 -1 -2 3 -3 -3 -2 3 15 2 2 -6 • Depreciation and amortization 11 trending down following 3 17 12 12 18 i
Slide 21: Volatile ROE to shareholders during the pandemic
Volatile ROE to shareholders during the pandemic Return on Equity excl. non-controlling interest per quarter (Annualized in percent) 20% 11% 9% 9% 10% • Axactor with volatile financial 5% 7% 7% 7% results during the pandemic 0% 0% 0% 4% -2% -1% -2% • The large negative NPL -3% revaluation booked in
Slide 22: NPL portfolio Q4 2021
NPL portfolio Q4 2021
Slide 23: NPL segment affected by negative revaluations in Q4
NPL segment affected by negative revaluations in Q4 NPL Gross Revenue and CM% (EUR million and %) 79% 77% 75% 78% 69% 66 69 66% 61 62 63 63 54 54 0 64% 9 1 59 • Gross revenue on NPL down 4% y-o-y 1 28 6 27 21 24 • 75% of NPL portfolio investments in 2021 28 38 23 27 0 26 was during the second half y
Slide 24: Revaluation on NPL in Q4 is driven by a collection shortfall
Revaluation on NPL in Q4 is driven by a collection shortfall NPL unsecured active forecast versus collection • NPL investments in second half of 2021 expected to increase cash collection in Q1 2022 compared to last two quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 25: Declining collection performance after a weak H2 2021
Declining collection performance after a weak H2 2021 Actual collection vs. active forecast1 (LTM, rolling) 112% 108% 106% 101% • Q4 collection performance of 91% 101% 98% 97% 98% 98% • LTM collection performance of 100% 96% 95% 94% 94% 92% 93% • Long term average performance expected to fluctuate a
Slide 26: NPL investment commitments of EUR 117m next 12 months
NPL investment commitments of EUR 117m next 12 months Quarterly NPL investments (EUR million) 95 90 • NPL investments increasing 62 Additional during the second half of 54 forward flow 2021 agreements and one-off • Trend expected to continue 35 35 acquisitions will 32 29 further increase in 2022 27
Slide 27: ERC decreasing by 1% y-o-y due to net negative revaluations
ERC decreasing by 1% y-o-y due to net negative revaluations Estimated ERC development Forward ERC profile by year (EUR million) (EUR million) -1% 2,153 2,160 2,169 2,159 2,119 2,130 2,141 269 262 2,038 2,052 226 201 178 160 142 127 115 103 93 84 72 58 51 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-
Slide 28: ERC split on estimated yield and amortization
ERC split on estimated yield and amortization - Axactor uses the IFRS industry standard, the effective interest method, to calculate amortization ERC next four quarters ERC next 15 years (EUR million) (EUR million) 71 269 262 Yield Amortization 68 66 64 226 201 41 161 143 178 42 39 40 160 125 109 14
Slide 29: 3PC Q4 2021
3PC Q4 2021
Slide 30: 3PC development
3PC development - Margins are improving. Structuring organization to be positioned for volume ramp-up 3PC total income and CM% (EUR million and %) 16 +3% 14 13 14 13 11 12 11 10 47% • The negative trend on 3PC revenue y-o-y has 44% 40% 40% turned into growth with a 3PC total income 36% 37% 30% growt
Slide 31: 3PC volumes by geographic region
3PC volumes by geographic region 3PC total income split by geographic region 1% 3% 18% 5% Q4’21 • Spain accounting for 60% of total income on 3PC Total income EUR 14.3m • Following the acquisition of C.R. Service in Italy 13% we expect Italy to increase their relative share to 60% between 10% and 15
Slide 32: REO portfolio (run-off segment) Q4 2021
REO portfolio (run-off segment) Q4 2021
Slide 33: REO development (run-off segment)
REO development (run-off segment) - Good sales momentum on a declining asset base, but with negative margins REO total income and CM% (EUR million and %) 21 -29% 13 12 12 10 10 9 • Axactor has sold off ~90% of the REO portfolio1 8 7 • Gross revenue for quarter came in at EUR 9m • Consolidated book v
Slide 34: REO portfolio in the tail
REO portfolio in the tail REO book value* REO # of units* (EUR million) 223 7,388 198 200 6,703 187 181 6,161 6,323 5,773 162 157 5,130 148 4,825 4,612 129 4,024 3,489 120 3,740 3,076 2,694 89 84 2,391 79 68 2,039 55 1,773 46 1,446 29 521 8 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 2017
Slide 35: REO statistics
REO statistics* (EUR million) Current book Asset class # assets % of total Book value % of total Housing 551 38% 16.8 57% Parking, annex etc. 491 34% 1.4 5% Land 217 15% 1.9 7% Commercial 187 13% 9.9 34% Eliminations 0 0% -0.7 -2% • Housing represent >50% of current book value Total 1,446 100% 29.3
Slide 36: Covenants Q4 2021
Covenants Q4 2021
Slide 37: Bond covenants (1/2)
Bond covenants (1/2) - Compliant with all covenants Loan-to-value1 - Covenant ≤75% Secured Loan-to-value1- Covenant ≤65% (Total portfolio book value divided by net interest-bearing debt) (Total portfolio book value divided by secured net interest-bearing debt) 75% 75% 74% 74% 75% 65% 72% 58% 58% 71%
Slide 38: Bond covenants (2/2)
Bond covenants (2/2) - Compliant with all covenants Leverage ratio1 - Covenant ≤4.0x Interest coverage ratio1- Covenant ≥4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted EBITDA (Pro-forma adjusted cash EBITDA divided by net interest expenses) 6.5 4.0 4.0 3.9 5.8 3.7 3.6 5.2 5.2 5.2
Slide 39: Appendix
Appendix
Slide 40: P&L statement
For the quarter end Year to date P&L statement EUR thousand Interest income from purchased loan portfolios 31 Dec 2021 43,506 31 Dec 2020 41,758 31 Dec 2021 168,421 31 Dec 2020 163,093 Net gain/(loss) purchased loan portfolios -44,588 -12,283 -62,013 -49,813 Other operating revenue 22,575 25,191 88,
Slide 41: Balance sheet statement
Balance sheet statement EUR thousand 31 Dec 2021 31 Dec 2020 Full year 2020 EUR thousand 31 Dec 2021 31 Dec 2020 Full year 2020 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Share Capital 158,150 97,040 97,040 Intangible Assets 17,824 19,989 19,989 Other paid-in equity 269,919 236,562
Slide 42: Legal organization December 2021
Legal organization December 2021 Axactor SE (Norway) 50%* Axactor Platform Holding AB Axactor Portfolio Holding AB Reolux Holding S.à r.l. (Luxembourg) (Sweden) (Sweden) Axactor Capital Axactor Finland Oy Axactor Norway Axactor Germany Holding Axactor España, Axactor Holding Luxembourg S.à r.l. Beta
Slide 43: Terms and abbreviations
Terms and abbreviations Abbreviations 3PC Third-Party Collection APM Alternative Performance Measures ARM Accounts Receivable Management B2B Business to Business B2C Business to Consumer BoD Board of Directors BS Consolidated Statement of Financial Position (Balance Sheet) Terms CF Consolidated Stat
Slide 44: axactor.com
axactor.com AXACTOR
Slide 45: Slide 45